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Ask the expert: Why can't people open savings accounts without producing a driver's license?

September 13, 2011

By Richard Barrington | MoneyRates.com Senior Financial Analyst, CFA

Q: I am an American citizen who has been living in Europe for the past eight years. I've had checking and savings accounts with Bank of America for 20 years, but when I closed out a CD with them to buy some property, I later found they would not open a new account for me. I still have a U.S. mailing address, but I no longer have a driver's license. Is there any bank that will accept an account from someone outside the U.S.?

A: If you want to know why you are having so much trouble opening a bank account without a driver's license, look no further than a story that has been in the news constantly of late because of the 10th anniversary of September 11, 2001: the war on terrorism.

After the attacks, the government put in place stricter anti-money-laundering rules. These were actually an extension of previous rules that had been prompted by the war on drugs, but as with many things, after 9/11 the security net was pulled even tighter.

The new anti-money-laundering rules put in place a "know your customer" obligation, which required that banks verify the identity of their customers. This applies across the board--savings accounts, money market accounts, CDs, checking accounts, you name it.

This is why your lack of a U.S. driver's license may have been an obstacle--it is the most commonly used form of identification when starting a bank account. However, if your driver's license has lapsed, the best answer might be your passport. Customer service representatives at banks are so used to dealing with driver's licenses that they would have routinely asked you to produce one, but a passport is considered at least as authoritative as a form of ID. Assuming that as an American living overseas you have an up-to-date passport, see if that isn't the solution to your problem.

Got a financial question about saving, investing, or banking? MoneyRates.com invites you to submit your questions to its "Ask the Expert" feature. Just go to the MoneyRates.com home page, and look for the "Ask the Expert" box on the lower left.

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